Johannesburg - The judgment of the Constitutional Court (Concourt) last week that attorneys could not charge more than 25 percent of a damages payout in no-win, no-fee case was a victory for victims, the Road Accident Fund (RAF) said yesterday.
The judgment affects not only people injured in road accidents but anyone who takes a damages case to court on a contingency basis. In successful contingency cases, the attorney’s fees are paid out of the award.
Eugene Watson, the chief executive of the RAF, said attorneys had turned a blind eye to the Contingency Fees Act and had been taken advantage of claimants.
The act states the plaintiff’s law firm can charge more than it normally would, but not more than double, and the fee cannot be more than 25 percent of the total monetary award.
Watson said the judgment provided much-needed clarity on so-called “common law” contingency fee agreements.
He said it paved the way for victims to pursue claims, potentially amounting to millions of rands, against lawyers who had helped them successfully claim from the RAF but had then charged fees in excess of what the law permitted.
“Future road accident victims should be more cautious in approaching personal injury lawyers and should rather claim directly from the RAF. This is indeed a major feat for the RAF and a great step forward for the rights of claimants,” Watson said.
Juanne Elize de la Guerre suffered head and spinal injuries in a car accident. Ronald Bobroff & Partners charged her R868 000 in professional fees, excluding disbursements, out of an award of R2.8 million by the RAF.
The law firm charged more than 30 percent of the award because certain law societies made provision in their rules for members to do so.
De la Guerre challenged the excess charge at the North Gauteng High Court. The court found in favour of the plaintiff.
Ronald Bobroff & Partners applied for leave to appeal to the Concourt on the basis of the rationality and constitutionality of the act after leave to appeal was denied by the full bench of the North Gauteng High Court and the Supreme Court of Appeal.
The Concourt unanimously dismissed the application.
The RAF said claimants who wished to verify the amount for which it had settled their claims, in order to determine the contingency fee deduction made by their attorneys, could contact the fund for help. - Business Report